Date: Fri, 29 Mar 1996 13:32:27 -0500 (EST)
From: ptownson@massis.lcs.mit.edu (Patrick A. Townson)
Subject: Formal FCC Complaint Filed Against I-Phone
This is a special bulletin received Friday morning regards the
squabble between the telephone companies and the I-Phone people;
the ones who use the software which allows voice communication
via the Internet. The war has started! It appears the carriers are
serious about getting rid of this Internet feature. A formal
complaint has been filed with the Federal Communications Commission.
PAT
Subject: LD Co.'s File Complaint Against Internet Phone Authors
From: drharry!aboritz@uunet.uu.net (Alan Boritz)
Date: Fri, 29 Mar 1996 09:12:59 EST
Organization: Harry's Place - Mahwah NJ - +1 201 934 0861
Retrieved this from ftp.fcc.gov last night. No official word yet on
the Commission's response (no docket no. yet). Also, no word yet on
precisely which "non-dominant telecommunications companies" are
actually represented in this petition:
ACTA Internet Phone Petition (RM No. 8775)
BEFORE THE FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554
In the Matter of
THE PROVISION OF INTERSTATE AND INTERNATIONAL INTEREXCHANGE
TELECOMMUNICATIONS SERVICE VIA THE "INTERNET" BY NON-TARIFFED,
UNCERTIFIED ENTITIES
AMERICA'S CARRIERS TELECOMMUNICATION
ASSOCIATION ("ACTA"),
Petitioner
PETITION FOR DECLARATORY RULING,
SPECIAL RELIEF, AND
INSTITUTION OF RULEMAKING AGAINST:
VocalTec, Inc.; Internet Telephone
Company; Third Planet Publishing Inc.;
Camelot Corporation; Quarterdeck
Corporation; and Other Providers
of Non-tariiffed, and Uncertified
Interexchange Telecommunications
Services,
Respondents.
To the Commission:
SUMMARY OF FILING
America's Carriers Telecommunication Association ("ACTA"), a
trade association of interexchange telecommunications companies,
submits this Petition for Declaratory Ruling, for Special Relief, and
for Institution of Rulemaking Proceedings. This petition concerns a
new technology: a computer software product that enables a computer
with Internet access to be used as a long distance telephone, carrying
voice transmissions, at virtually no charge for the call.
ACTA submits that the providers of this software are tele-
communications carriers and, as such, should be subject to FCC
regulation like all telecommunications carriers. ACTA also submits
that the FCC has the authority to regulate the Internet.
ACTA submits that it is not in the public interest to permit long
distance service to be given away, depriving those who must maintain
the telecommunications infrastructure of the revenue to do so, and nor
is it in the public interest for these select telecommunications
carriers to operate outside the regulatory requirements applicable to
all other carriers.
ACTA asks the Commission to issue a declaratory ruling confirming
its authority over interstate and international telecommunications
services using the Internet.
ACTA asks the Commission, as special relief. to order the
Respondents to immediately stop their unauthorized provisioning of
telecommunications services pending their compliance with 47 U.S.C.
Sections 203 and 214. and in order to give the Commission time for
appropriate rulemaking.
ACTA asks the Commission to institute rulemaking to govern the
use of the Internet for providing telecommunications services.
PETITION FOR DECLARATORY RULING,
SPECIAL RELIEF, AND INSTITUTION OF RULEMAKING
America's Carriers Telecommunication Association ("ACTA"). by
its attorneys, submits this Petition for Declaratory Ruling, for
Special Relief, and for Institution of Rulemaking Proceedings. In
support of this petition, the following is shown.
STANDING
ACTA is a national trade association of competitive
interexchange, non-dominant telecommunications companies. Its members
provide interexchange telecommunications services on an intrastate,
interstate and international basis to the public at large.
Some of its members also act as underlying (or wholesale)
carriers providing network facilities, equipment and service to other
member carriers which permits telecommunications services to be resold
to the public. Other ACTA members supply facilities and equipment to
member and non-member wholesale and resale carriers.
ACTA's carrier members must be certificated and tariffed before
the FCC and most state regulatory commissions in order to render their
telecommunications service to the public. In addition, ACTA carrier
members are subject to the requirements of the Communications Act of
1934, as amended (the "Act"), and various state laws and regulations
which prohibit engaging in unreasonable practices and/or unduly
discriminatory conduct.
ACTA carrier members are required to pay, directly, or
indirectly, various fees and charges in order to render their services
to the public. Filing fees and annual fees are levied by the FCC and
most states.
In addition, the FCC and most states require interexchange
carriers to assess and collect from the using public specific charges
to support various regulatory policies and programs used to sustain
and advance national and state goals for telecommunications.
Entities, like those which are described hereinafter, which do
not comply with or operate subject to the same statutory and
regulatory requirements as ACTA's carrier members, distort the
economic and public interest environment in which ACTA carrier members
and nonmembers must operate. Continuing to allow such entities to
operate without complying with or being subject to the same legal and
regulatory requirements as ACTA carrier members threatens the
continued viability of ACTA's members and their ability to serve the
public and acquit their public interest obligations under federal and
state laws.
As the appointed representative of its members charged with
advancing their economic interests and assisting in achieving and
maintaining their legal and regulatory compliance, ACTA has standing
to file and prosecute these petitions.
STATEMENT OF FACTS AND BACKGROUND
A growing number of companies are selling software for the
specific purpose of allowing users of the Internet to make free or
next to free local, interexchange (intraLATA, interLATA) and
international telephone calls using the user's computer (Attach ment
1). One of the Respondents, VocalTec, Inc., advertises the ability of
its software called "Internet Phone," to connect any user of "Internet
Phone" with any other user of "Internet Phone" anywhere in the world.
The software enables users to audibly talk with one another in
real-time. Respondents make a one-time charge for the software, but
users incur no other charges for making local or long distance
telephone calls to any other "Internet Phone" user in the world
(except for whatever the user already pays monthly to whomever
provides them Internet access).
ASSERTION AND ENFORCEMENT OF JURISDICTION
ACTA submits that it is incumbent upon the Commission to exercise
jurisdiction over the use of the Internet for unregulated interstate
and international telecommunications services. As a first step, ACTA
submits that the Commission may deem it appropriate to issue a
declaratory ruling officially establishing its interest in and
authority over interstate and international telecommunications
services using the Internet.
Secondly, ACTA submits that the Commission has an obliga tion,
heightened by the recent enactment of the Telecommunications Act of
1996, to address on a focused basis the on-going, unregulated and
unauthorized provisioning of telecommunications services. The
Commission should, as special relief, issue an order to the
Respondents to immediately stop arranging for, implementing, and
marketing non-tariffed, uncertified telecommunications services
without complying with applicable provisions of the Act, particularly
Sections 203 and 214, codified at 47 U.S.C. Sections 203 and 214.
Further, ACTA submits that it is incumbent upon the Commis- sion
to examine and adopt rules, policies and regulations govern ing the
uses of the Internet for the provisioning of telecommuni- cations
services. The use of the Internet to provide telecommu- nications
services has an impact on the traditional means, methods, systems,
providers, and users of telecommunications services. The unfair
competition created by the current unregulated bypass of the
traditional means by which long distance services are sold could, if
left unchecked, eventually create serious economic hardship on all
existing participants in the long distance marketplace and the public
which is served by those participants. Ignored, such unregulated
operations will rapidly grow and create a far more significant and
difficult to control "private" operational enclave of telecommu
nications providers and users. Such development will clearly be
detrimental to the health of the nation's telecommunications industry
and the maintenance of the nation's telecommunications infrastructure.
ARGUMENT
Commission's Authority to Regulate the Internet. ACTA submits
that the Commission has the authority to regulate the Internet under
the provisions of 47 U.S.C. Section 151, which created the
Commission:
[for the purpose of regulating interstate and foreign commerce in
communication by wire and radio so as to make avail able, so far as
possible, to all the people of the United States a rapid, efficient,
Nation-wide, and world-wide wire and radio communication service with
adequate facilities at reasonable charges, for the purpose of the
national defense. for the purpose of promoting safety of life and
property, through the use of wire and radio communication. . . .
The Internet is a unique form of wire communication. It is a resource
whose benefits are still being explored and whose value is not fully
realized. Its capacity is not, however, infinite. The misuse of the
Internet as a way to bypass the traditional means of obtaining long
distance service could result in a significant reduction of the
Internet's ability to handle the customary types of Internet traffic.
The Commission has historically protected the public interest by
allocating finite communications resources/frequencies and organizing
communications traffic. ACTA submits that here also it would be in
the public interest for the Commission to define the type of
permissible communications which may be effected over the Internet.
Commission's Authority to Regulate Respondents as Interstate
Telecommunications Carriers. ACTA submits that by both estab- lished
precedents defining "common carriage" or public utility" type of
operations for purposes of regulatory jurisdiction, and by statutory
enactment, the Respondents, as purveyors of Internet long distance
services, are interstate telecommunications carri- ers, subject to
federal regulation. Section 3 of the new "Telecommunications Act of
1996," Pub. L. No. 104-104, 110 Stat. 56 (1996), to be codified at 47
U.S.C. Section 153, includes the following definitions:
(48) Telecommunications. -- The term "telecommunications" means the
transmission, between or among points specified by the user, of
informa tion of the user's choosing, without change in the form or
content of the information as sent and received.
(49) Telecommunications Carrier. -- The term "telecommunications
carrier" means any provider of telecommunications services, except
that such term does not include aggregators of telecommunications
services (as defined in section 226). A telecommunications carrier
shall be treated as a common carrier under this Act only to the extent
that it is engaged in providing telecommunications services, except
that the Commission shall determine whether the provision of fixed and
mobile satellite service shall be treated as common carriage.
(51) Telecommunications Service. -- The term "telecommunications
service" means the offering of telecommunications for a fee directly
to the public, or to such classes of users as to be effectively
available directly to the public, regardless of the facilities used.
It would appear that Respondents are currently operating without
having complied with the requirements of the Communications Act of
1934, as amended, applicable to providing interstate and international
telecommunications services. e.g., Sections 203 and 213, codified at
47 U.S.C. Sections 203 and 214.
Case law also supports the Commission's authority to regulate
the Respondents. In 1968, the Supreme Court was presented the issue
of the Commission's authority to regulate the cable television
industry, or CATV, then still in its infancy but growing quickly. In
United States v. Southwestern Cable Co., 392 U.S. 157 (1968), the
Supreme Court had to decide whether the Federal Communications
Commission 1) had the authority under the Communications Act of 1934,
as amended, to regulate CATV systems, a new technology and therefore
not specifically discussed in the Act, and 2) if the Commission had
such authority, whether it also had the authority to issue the
particular prohibitory order that it had: one designed generally to
preserve the status quo pending further investigation and proceedings,
and not issued pursuant to the cease and desist rules of Section 312
of the Act (47 U.S.C. Section 312).
The Supreme Court answered both questions in the affirmative.
The Supreme Court stated that "the [Federal Communications] Commission
has reasonably concluded that regulatory authority over CATV [was]
imperative if it [was] to perform with appropriate effectiveness
certain of its other responsibil ities." Id. at 173. At that time,
cable television characteristically neither produced its own
programming nor paid producers or broadcasters for use of the
programming which CATV redistributed. Id. at 162. The Court noted
the Commission's concern that competition by CATV might destroy or
degrade the service offered by local broadcasters and exacerbate the
financial difficulties of UHF and educational television
broadcasters.
Commission's Authority to Grant Special Relief to Maintain the
Status Quo. With regard to the procedural issue, the Court in
Southwestern Cable upheld the authority of the Commission to issue an
order maintain the status quo. The argument was made that the
Commission could only issue prohibitory orders under the Act's Section
312 cease and desist provisions which, the Court assumed without
finding, were only proper after a hearing or the waiver of the right
to a hearing. The Court rejected that argument stating:
The Commission's order was thus not, in form or function, a
cease-and- desist order that must issue under Sections 312(b), (c).
The Commission has acknowledged that, in this area of rapid and
significant change, there may be situations in which its generalized
regulations are inadequate, and special or additional forms of relief
are imperative. It has found that the present case may prove to be
such a situation, and that the public interest demands "interim relief
limiting further expansion," pending hearings to determine appropriate
Commission action. Such orders do not exceed the Commission's
authority. This Court has recognized that "the administrative process
[must] possess sufficient flexibility to adjust itself' to the
"dynamic aspects of radio transmission," F. C. C. v. Pottsville
Broadcasting Co., supra, at 138, and that it was precisely for that
reason that Congress declined to "stereotype the powers of the
Commission to specific details......... National Broadcasting Co. v.
United States, supra, at 219.
The Commission should take the same action in 1996 with regard to the
new technology of long distance calling via Internet as it did thirty
years ago in 1966 with regard to the then-new technology of cable
television: grant special relief to maintain the status quo so that it
might carefully consider what rules are required to best protect the
public interest and to carry out Its statutory duties.
Other Issues Necessitating the Commission's Regulation of Long
Distance via the Internet. The Commission has a duty to oversee and
effect the Telecommunications Act of 1996 as well as its
long-standing duties under 47 U.S.C. Section 151. The Commission
should take action in order to preserve fair competition and the
health of the Nation's telecommunications industry. Absent a healthy
industry, with users paying telecommunications companies a fair price
for telecommunica tions services, the Commission's duty to effectively
promote universal service cannot be achieved. Absent action by the
Commission, the new technology could be used to circumvent
restrictions traditionally found in tariffs con cerning unlawful uses,
such as gambling, obscenity, prostitution, drug traffic, and other
illegal acts.
INFORMATION REGARDING RESPONDENTS
ACTA does not possess a listing of all the companies providing
free long distance calls via computer software. However, Attachment I
contains some information regarding the following Internet telephone
software companies and products:
a. Company: VocalTec, Inc.
157 Veterans Drive
Northvale, NJ 07647
Telephone: (201) 768-9400
Product: Internet Phone
Distributors: VocalTec, Inc.; and
Ventana Communications Group
Research Triangle Park, NC
b. Company: Internet Telephone Company
Boca Raton, FL
Telephone (407) 989-8503
Product: WebPhone
c. Company: Third Planet Publishing Inc.
a division of Camelot Corporation
Product: Digiphone
d. Company: Quarterdeck Corporation
13160 Mindanao Way, 3rd Floor
Marina Del Ray, CA 90292
Telephone (310) 309-3700
Product: WebTalk
e. Company: Unknown
Product: CyberPhone
CONCLUSION
Permitting long distance service to be given away is not in the
public interest. Therefore, ACTA urges the Federal Communications
Commission ("the Commission") to exercise its jurisdiction in this
matter and: issue a declaratory ruling establishing its authority over
interstate and international telecommuni- cations services using the
Internet; grant special relief to maintain the status quo by
immediately stop the sale of this software; and institute rulemaking
proceedings defining permissible communications over the Internet.
Respectfully submitted,
AMERICA'S CARRIERS
TELECOMMUNICATIONS ASSOCIATION
Charles H. Helein
General Counsel
Of Counsel:
Helein & Associates, P.C.
8180 Greensboro Drive
Suite 700
McLean, Virginia 22102
(703) 714-1300 (Telephone)
(703) 714-1330 (Facsimile)
Dated: March 4, 1995
Footnotes:
1 47 U.S.C. 201 et seq.
2 The user must hook up a microphone to his computer and
either a headset or speakers.
3 ACTA asserts that Respondents are also intrastate
telecommunications carriers, subject to regulation by state
public utility commissions.
4 The Commission had ordered that respondents, a cable
company, generally restrict their carriage of Los Angeles signals
to areas served by them on February 14, 1966, pending hearings to
determine whether the carriage of such signals into San Diego
contravened the public interest. The order did not prohibit the
addition of new subscribers within areas served by respon dents
on February 15, 1966; it did not prevent service to other sub
scribers who began receiving service or who submitted an ac-
cepted subscription request" between February 15, 1966, and the
date of the Commission's order; and it did not preclude the
carriage of San Diego and Tijuana, Mexico, signals to subscribers
in new areas of service. United States v. Southwestern
Cable Co., 392 U.S. 157, 180 (1968).
5 Id. at 180.